With roughly half of all Oregon births covered by Medicaid, hospital administrators say it is likely that more hospitals — already operating on thin margins — may follow Baker City’s lead. An InvestigateWest analysis of financial disclosures submitted to the Oregon Health Authority shows the average operating margin among the state’s 60 hospitals was about -0.5% in 2024. Rural hospitals receive fewer patients compared to their urban counterparts and typically are limited in their ability to offer specialized services, which can be more financially lucrative and offset losses in other departments. Still, Medicaid remains a financial lifeline for rural hospitals, and administrators say constricting that critical source of revenue may threaten their ability to sustain services like obstetrics at the same level moving forward. For instance, the average reimbursement the Oregon Health Plan gave to hospitals in 2023 for a complication-free, vaginal delivery was about $8,521.